NIIT acquires Osprey for $3 m

IRIS

NIIT, a leading global IT solutions provider, announced acquisition of

US-based Osprey Systems, a privately held full life cycle SAP solutions provider

for $3 million in all cash deal. The acquisition is expected to generate $35

million revenues over the next three years. With this acquisition, NIIT would

jumpstart its entry into the lucrative and demanding SAP solutions-based segment

in US.

NIIT CEO Vijay Thandani said, `This acquisition was driven by NIIT`s

recognition of the size and the growth prospects of the consulting,

implementation, integration, training and full life cycle solutions around SAP

in the US. The potential for leveraging our global reach and capacity to provide

customers with better, faster and more competitive solutions is attractive. Our

positive experience in providing SAP-based solutions in Asia and Japan has

strengthened our interest in this segment`.

Osprey would become the SAP solution-focused business division of NIIT in the

US with Tom H Wilson, Jr, an accomplished IT executive, as its president. Osprey

has been an SAP services and channel partner since 1995 and has implemented many

full life cycle SAP solutions in addition to being a qualified vertical

solutions provider of SAP. The acquisition brings NIIT a high calibre management

team and an experienced technical team of 50 professionals.

According to a leading market researcher, the global market for IT services

in packaged software support and installation was $48 billion in 2001. It is

expected to grow to $86.6 billion by 2005. US and Europe account for 85 per cent

of this market. SAP is a dominant product provider and has been expanding its

product offerings significantly to address a wider segment of customers.

Services around SAP solutions offer strong prospects for growth.

Osprey Systems is headquartered in Charlotte, North Carolina, USA and is

engaged in SAP implementation and consulting business. It caters to small and

medium enterprise segment and has a client list of around 30 companies including

Coats American, Compass Group, Sulzer, SAP, FMC Lithium, Burke Mills and

Southern Pump. The company has recorded revenue of $10 million in the year 2001.

It`s offerings include enterprise resource planning (ERP) implementation,

enterprise application integration, technology architecture and management,

hosting, training solutions and customer support solutions.

Recently, NIIT acquired the content and implementation business of

Click2learn, US-based learning management solution provider. The deal was valued

at $3 million with annual revenue size of $8 million. NIIT`s global reach will

help to serve Click2learn`s strong customer base of 300 odd clients, of which 50

are amongst Fortune 100 companies.

Th company`s acquisition policy is primarily focused on acquiring the client

base in the US market in select practices and verticals. NIIT has decided to

focus on three business practices: enterprise integration, legacy maintenance

and customised software development apart from building three verticals:

banking, insurance and finance (FIP), transportation and retail. The company

would continue its efforts for inorganic growth in these areas.

On stand alone basis, in the quarter ended December 2001, NIIT`s income from

operations stood at Rs 108.73 crore (Rs 155.81 crore in the quarter ended

December 2000), while net profit after tax stood at Rs 3.46 crore (Rs 29.83

crore). For the year ended Oct-Sept 2001, the company`s income from operations

stood at Rs 687.51 crore (Rs 1237.10 crore in year ended Oct-Sept 2000) and net

profit after tax and extraordinary items stood at Rs 95.96 crore (Rs 224.13

crore).